“Facings” in the retail industry refers to the amount of shelf space a particular product is given. A lot of facing generally increases sales of a particular product, and frequently manufacturers will pay more money to get more facings for their products. This inevitably leads to situations where the largest manufacturers end up with the most amount of facings because they are able to pay the most.
In conjunction with facing determinations for retail products, efficient allocation of shelf space and product assortment can significantly improve a retailer's profitability. A retail shelf space optimization problem in general is the problem of finding the optimal placement of merchandise items on the shelves to maximize one of many potential key performance indicators (“KPI”), such as revenue, profit or sales volume, by deciding where to place an item and how many facings to allocate subject to business and operation constraints.
The shelf space optimization problem can be considered a micro-space optimization problem in that it is the problem of creating a planogram (“POG”) for a given retail category within given physical space. A POG is a diagram or model that indicates the placement of retail products on shelves in order to maximize sales